Dividend payments outpace profits at FTSE 350 firms for the first time since the recession

Dividend payouts were higher than profits for the first time since the recession (Source: Getty)

Jake Cordell

The UK’s top firms paid out more in dividends last year than they made in profits for the first time since the recession, as they ate into reserves, balances sheets and future earnings to protect payouts to shareholders.

“They will only cut dividends when they believe there is a necessity to, as its sends out a signal that perhaps the experience of the company and the situation it is in isn't just a short-term issue. As soon as they make a cut they are seen as a lot less dependable by investors.”

Helal Miah, an analyst at The Share Centre said: “Finance directors will usually try to ride out a soft patch for profits and hold the dividend steady for as long as they prudently can. Eventually, it is important to face facts.”